EP37 - The Decision to become an ESOP company - a discussion with Todd Knowlton - CEO of Smooth Fusion from Lubbock, Texas.

Welcome back. Thanks for tuning in. I'm the ESOP guy and you are on a journey to an ESOP and so excited to um be able to do this podcast today. This, this podcast is really a resource that we've created to help folks that are thinking about turning their business into an employee stock ownership plan. And so it's a resource available if that's your first time tuning into the podcast, I just wanted to say thank you for joining today. And if you have an interest in other episodes, please go to our website at journey to an ESOP.com. And today we have the, the privilege of interviewing, um, a very recent, um, new ESOP company, and the gentleman I'm interviewing is Todd Knowton, and he represents a company called Smooth Fusion. And I thought it would be really helpful for, um, for Todd just to share his story with everybody and And what we're gonna, we're, we're gonna kind of lean into is um the decision to become an ESOP company. And I think a lot of people um will benefit by listening to this or watching this YouTube and that just, just the process that Todd has gone through. To get to where he is. And it's, it's interesting because he's at a place where we're, we're pretty much done with the first stage transaction. We're not completely done yet, so it's fairly, fairly new. But really what we wanted to talk to Todd a lot about was just kind of the, the steps that he went to at the very beginning to get to where he is today. So with all that, I wanted to say welcome, Todd to our podcast. Thank you, Phil. Thanks. Thanks for joining us. So why don't we start off with just kind of a, uh, an overall question like tell us a little bit about smooth Fusion, your company, and just kind of your, your a little bit about what you guys do in terms of, um, you know, your operations and your, and the way your business works. Sure, we are a, uh, at the heart of it, we're a web development company. We, uh, we've been, we're, we're almost 21 years old, uh, been doing, uh, kind of the high end of web development for those years. So we are, uh, we serve what we would call enterprise clients, but, you know, basically the, uh, not necessarily Fortune 500, but uh sophisticated clients that spend uh real budgets on their website. And so we do everything from the design to the implementation to the ongoing support for websites and web applications. Awesome. And you guys are located in Texas? Lubbock, Texas. People kind of spread all over the place. We, uh, a lot of remote, uh, folks, but, uh, but our headquarters is in West Texas. And so you're the way the structure of your company is, you have um you have multiple shareholders and so it's, it's not just you making the, the call on what, what's gonna happen, right? That's right, yeah, we've got two other shareholders besides me. So, so let's kind of like with, with that in mind, OK, when I, when I asked that question too, I've seen and work with companies where we got one shareholder and it's him or her, whatever they say goes and in other cases, we have multiple shareholders and it's a little, when you do ESOP work, you kind of have to work through and make sure all the shareholders are kind of up to speed. When you first thought about and I, and I think that the story is you're the one that came, came up with the idea for the ESOP, right? Yeah, that's right. Uh, we, we've been, uh, pretty much an open book management kind of company for a long time. Uh, and very transparent with our people all along. And so the, uh, the ESOP ended up, or, or some kind of employee ownership anyway, ended up being on our radar as just a natural next step. And there was, there's really kind of two things that I never wanted to see happen. I didn't want to be uh one of those founders who Waited till I was really old and desperate to figure something out, some kind of transition plan. Uh, wanted to start thinking about it early and, uh, and particularly since a lot of our people are here in West Texas, another issue that was always really important to us was We, we knew that the kind of company that would likely be a buyer for a company like us would probably not really value uh our people in West Texas necessarily. It would be more of a buy them out because of their customer list or this kind of thing. And so, uh, so it was important to us to protect. Uh, to protect that and at least give our employees the opportunity to, um, uh, to kind of take it and run. And, and we've had really good luck uh developing great leadership, uh, from within our ranks and so it just made a lot more sense. And, and seemed like the fair thing to do as well to, to look into employee ownership and not just, uh, uh, you know, obviously we're in a, we're in an industry where there are buyers, we get contacted regularly, folks that would like to, to buy our company, but that just didn't feel like the right thing for us. No, for sure. And you are, you're like in your case too, you're not ready to sell. Your stock, really, I mean, we're going to talk about as a non-leveraged ESOP where you guys actually contribute your money or you contribute your shares in this case to this brand new ESOP that you created. How, how hard was it to convince your shareholders that the ESOP was the right direction to go? Uh, in our case, actually not hard at all. We've got, uh, one of our shareholders is a, a, a person we invited to be a shareholder because he's just a brilliant guy and he's, uh, he's just a good friend and, and so he's supportive of everything we wanna do. He is not involved in the company. He's an outside shareholder. Uh, the other, the third shareholder, the other one is, is my original co-founder, been with me since day one, actually was an employee of mine in my previous company, 20 something years ago. And, uh, and he and I have very similar uh values on that and, and desires to uh really protect our employees and, and create the place, you know, that we wanted to create and so, Uh, so in our case, it was not a tough thing at all. No, no, that's good because I've had, I had clients where I spent like two months telling, trying to convince everybody. You know, hey, this is, this is gonna be a good thing and I do a lot of like uh analysis to show people like, uh, this is what it's gonna look like on the tax side and, you know, so, so that's good. I think obviously every company is different and so you guys um And now you, before, before all that happened, I know you went to like a lot of, you know, uh conferences and different and invested in a lot of like research. Tell us a little bit about the process for you to start like learn about ESOPs and how, and how did that go? Yeah, so we, uh, I guess it's been at least 4, maybe 5 years that, that I've been educating myself on this. And so that was part of it too is we've taken a long time to learn about it and, and sort of look at our options. Uh, honestly, my initial uh reaction to ESOPs was not terribly positive. They seemed very complex and Uh, so I, I actually kind of for a while was out there looking for the best alternatives to ESOPs. And, uh, but the, the more people I talked to and the more I learned about it, uh, started to realize that the benefits were gonna outweigh the, the hassle of it, I think. And, uh, so ultimately, we, we actually got pretty excited about the ESOP and, and the way it's structured and And what it does and, and, and especially I think from the employee standpoint, it's, it's actually pretty simple and that's what I liked about it. It's a little more complex, maybe from the company's standpoint than some options, but I felt like from our employee side, it was gonna be a pretty, pretty easy to understand and, and very valuable to them. And then when I learned about the tax, uh, Uh, advantages, you know, to us as well and to the company that, that was a contributing factor as well. So I started going, yeah, 4 or 5 years ago, started going to conferences, meeting people, uh, you know, looking to meet people that had, uh, obviously adopted ESOPs and their own companies, get their experiences, meeting some of the, you know, the service providers out there as well. Uh, and it was, uh, uh, and because we weren't in a hurry, you know, I didn't feel any pressure to, to move at any particular pace, but we, uh, probably a year or so into to go into those conferences, I was pretty convinced that's where we would eventually end up. Yeah. So, I have a question about the conferences for you specifically because my, I think my first conference I went to, I was just like, wow, there's a billion people here and You know, and I'm a, I'm a service provider, so coming from your perspective, I, I could imagine, um, it had to be a little bit like, who, what do I do for, you know, it's like a big trade show when you get down to it. Um, did you feel overwhelmed or how did you, how did you navigate the conferences? Cause I'm sure a lot of people listen and they'll probably end up, now we, now we're going to conferences again because COVID is over. Um, what would you, what advice would you give them in terms of investigating the best options? Yeah, it's, uh, I think. Couple of things. One is, I, I went to, uh, you know, both ESOP Association and NCEO kind of conferences. Um, pretty early on, I went to one of the fall forums that NCEO puts on. Uh, that was great because it was a smaller crowd and I really got to meet a lot of people. Uh, it wasn't nearly as overwhelming as, as the big, the big shows are. Uh, so I would definitely recommend that is, is go to something like the Fall Forum where you, you get a, a smaller crowd to talk to. Uh, and then I think just in general, I think what I learned was, you know, the sessions are great, and I learned a lot in the sessions, but ultimately, you could learn that on a podcast or something else. It's the, uh, it's the people you meet at those conferences and you just have to, uh, you know, one, you know, when you start meeting people. Uh, see who they would like you to meet, you know, the, uh, all the, the people that we're working with today came out of relationships that, uh, were sort of built that way. Somebody said, oh, you need to talk to this person over here, and then they bring in people they like to work with and, and that's how I really, I think, started to feel a comfort level with OK, there's some really good people in this mix that, that think like me and, and, you know, we're gonna be on the lookout for, uh, our interest in this and, and they're gonna be patient with us as we learn and, and so, uh, you know, and, and yeah, just walking through like the exhibit hall kind of stuff. I never got a whole lot out of, uh, at the conferences, it was, it was really the uh meeting folks and um. And, and, and the sessions can be good, but yeah, but yeah, that's one of the things I was like, you know, to be honest, like when the COVID happened and they're having virtual conferences. I'm like, why do a virtual conference? I mean, just being totally honest, like, I'd rather go, I wanna go meet people. I want to build, like, like you said, I want to go build relationships with people, um, because I think in the end that they have, you know, you're, you're not just trying to find somebody to help you with your ESOP. It's you're trying to to really talk to people and understand, you know, you're trying to get as much information as you can. But ultimately, when you do decide to do a transaction, Um, at some level, you're going to want to feel comfortable with these people and ESOP people are all over the country, but, you know, you're not like, you know, you're in Texas and I'm in Florida and you know, I think when we did your deal, the guy that did the evaluation is in Tampa, but, you know, we're, we're kind of, we don't have to be next door to you and that's really the case. Like you're not gonna have people in your own hometown typically to help you. So, going to conferences, I think really helps to get comfortable with who you might be dealing with. Um, and then just kind of going into a conference, what would you say would be, um, You know, cause you're gonna get approached by a, by a lot of people, right? And it, it is a place for people to sell their services. So it's not, you know, that's kind of what you need to gear up for. Hey, I'm gonna have, people are going to pitch me why they should, why I should go with them. What was your experience like with that, with people coming and say, hey, you should, you should definitely go with us because we're, we're the best. Yeah, uh, you know, I guess I, I was always willing to hear him out. I think, uh, uh, I was primarily looking for You know, people that I felt like I connected with, um, and I think one of the things that Uh, especially the larger companies that are represented there, uh, often the, the folks that they send to the conferences or, you know, kind of sales folks, and I don't generally connect that well with salesy people. So I didn't feel like I got a whole lot out of some of those discussions, whereas, uh, you know, the, the smaller, uh, and I think it's what's actually kind of really interesting about the ESOP world is Some of the what would seem like smaller providers actually have a ton of experience and they're they're really the ones that, that know the depth and breadth of a lot of this stuff. And I connected with those folks so much more and you, you didn't, you knew that was the person I would be dealing with if I engaged this company. If I engage the big company, well, the sales guy that I talked to at the conference, I'm never gonna see again and, and so, so it was, uh, I, I think that actually brought a lot of comfort to me was seeing that there were some. Uh, smaller providers that really knew their stuff and were very well connected and, and you know, the ESOP world is, is kind of a big community too. They all know each other, uh, and, and that's good too, and, and I think that's, uh, you know, helped, uh, helped me get to. You know, I mean, even, you know, a lot of those folks will take you to dinner if you go to the conference. So you get free dinners out of it, you know, you know, and those are valuable because you get to sit and really, uh, you know, chat with somebody, get to know them a little bit. And uh decide if this is somebody you would feel comfortable, you know, getting involved with because obviously, you know, it's, it's your baby, right? You're, you spent a lot of time building this company up and, and you wanna, you wanna feel like the folks that you're engaging with or uh they get you and they get what you're wanting to do and that they're competent and um. But, but I feel like there's a lot of really good competent folks out there. Yeah, yeah, for sure. And there, there are, and, and it's just a matter of doing what you did is what I like about your story is you started so early in the process and you know, I meet people all the time that are ready to do it now, you know, it's time to do it now. And unfortunately, they haven't done any real research, they haven't done any real planning and they may definitely take the first person that they talked to because I think ESOP people are pretty smart in general, and even the sales people are gonna, they're going to come across pretty smart, like, hey, um, so my, my biggest thing with people and part of this podcast is just to help people make good decisions on, you know, I don't, I mean, for, for me, I just want them to choose the right people, they feel comfortable with just like you did, Todd. Um, feel good about that, but do your research because this is an asset that you've created all these companies like 30 years, 40 years of your life have gone into creating this, and how many times you're gonna sell it once, right, when you get down to it. So kind of important to do, to do it the right way. Um, so, so I really do always tell people, um, even if you're 5 years, 10 years, even 10 years out, you know, just start looking at these things now, because they, they truly make a difference in um how you're going to pull that off. And it may not be, you may not do an ESOP. I've got several clients right now that They're like, hey, I don't necessarily know I want to do an ESOP. And so the process that you go through, you wanna evaluate, use the ESOP, but evaluate other options because um it's not, it really isn't for everybody, um, but, you know, as you come back to um your story, I think it was very um valuable that you took the time. And that was one of the reasons I wanted to talk to you because you took the time to do it, and you were patient with it, and you weren't, you know, you weren't needing to get anything done right away. So that gave you, I think that gives you an advantage when you're starting, when you're starting to think about it. Yeah, yeah, starting early was a, a good deal for us cause we've Uh, we've just had plenty of time to say, well, you know, we look at it next year, this, you know, whatever, you know, this really has been, uh, you know, being rushed would have been scary, I think. Yeah. So far, like in your um employees, do they know where you are with it yet, or we, they, they're all up to speed? In fact, if, if, if we made any mistake, probably we started talking about it too early because we did move pretty slow, but Uh, we're so transparent with our employees. We just, you know, they just have to get used to that. And, uh, so we started talking to them about it literally years ago and, uh, and then we did a, we actually did a survey of our employees, uh, a little over a year ago, maybe a little pre-pandemic, and the, at that time, they're just, there was not an overwhelming Uh, understanding of exactly what it was, you know, in the survey, what basically came back was, uh, people still felt a little unsure about what does all this mean and all. So we spent, we spent 6 or 8 months, uh, doing a lot of very intentional education, uh, with our employees about what it would mean, how it would work, uh, let them ask absolutely any question they wanted to ask. And uh and did a whole series on that and then repeated that exact same survey with the exact same questions and got an overwhelming heck yeah, we're ready for this. And so that was uh uh I think that was another nice thing about having the time to move slowly is we, our employees know now what this is, what to expect. They understand the timeline, uh, of what's going on and, and so, and I think you start to get, I, I mean, I think we definitely are already reaping the benefits and have been for the last year or so of employee ownership even though they still haven't gotten their first statement. Yeah, dude, I'm telling you what, that's phenomenal. Like you get like way early on. I love it. So the survey, I've never heard people do it, so like that. That's great. So the survey you use to educate them, and then you got feedback from them specifically as to what their thoughts are. And then when you did redid it, basically, it showed that their, their um comprehension and knowledge of what the ESOP was, was, was rifling up. Yeah, and their interest in it, so, you know, because that was what we were really trying to, to gauge was, you know, in what areas do they have concerns about it and what areas are they excited about it. And you know, we had a, a few employees that really clicked with it early on and they were gung ho, you know, on the first survey, but, uh, but it took a while and more education to, to get everybody ready for that. And, uh, and, and part of that, uh, as you know, we, uh, uh, we had some debt we were working off from buying out a previous shareholder. So part of our slower timeline was we wanted to be debt-free, and so, you know, we achieved that and so that we could roll into this, uh, you know, in a, in a good position. Uh, as a debt-free company and all of that as well. And so, and, and, you know, we're transparent about that with our employees. They, they knew why we had debt and what went on and, and, you know, so, um, and that same ESOPs just fit really well if you're gonna have that kind of culture, uh, if you're not really gonna share and have open book management and all with it, then you probably are missing out on, uh, the real magic of the ESOP. Uh, if it's just this statement that shows up once a year and they don't really understand what's behind it, I think you're missing a great opportunity to, to get more out of it. Well, let me ask you that because the open book thing, I, I, I will tell you that I have one other client that's open book management and um they're, they're pretty much like they're where you are, they're doing their big transactions soon, um. And so I have enough information from like, from how they do their business. So how long have you guys been, when you say open book management, what do you mean? Just let's start with that and then. So, so in our case, we are transparent about all the numbers and the metrics, you know, they, they know all the metrics that are important to us as a company, they know what those numbers are, they know our revenue numbers. Uh, they, you know, we discuss level of profitability. So, you know, we're not showing everybody absolutely every line item of everything, but they, they, they know exactly how we're doing and, and, and why and we talk about what's, what's driving the different metrics and all that. We've been doing that, uh. Probably 4 or 5 years in a, in a really big way where we're really, you know, very open book. Uh, and so yeah, we've been doing that for 4 or 5 years. Even before that, we were always pretty honest and transparent with people about how things are going, but, but now they, they see the numbers like just this morning, a report went out from our accounting guy downstairs that showed the folks where, you know, uh, The trends on our numbers and how we're doing and and of course we're in a, you know, in a, in a business that billable hours and all those kind of the metrics are pretty uh pretty basic metrics and uh so they're and and we hire smart people, you know, we've got. Uh, on a company full of software engineers and folks that are numbers people, so they appreciate the numbers. Yeah, I bet you, yeah, they get it. Like, you know, they, it didn't take them, it didn't take you like a lot to explain the financial statement to them. Do they know how much you make personally? Like, OK, I was just curious, so they don't know your officers salary. That's good. And they don't know, like, um, sorry for me if they knew. I, I know, like, well, I think that's funny. The thing about open book management is some people think a business owner makes a lot like, you know, they're taking all the cash out of the business and they're, you know, they've got this, you know, big mansion somewhere and, um, and the truth is, is most business owners. Small to mid-size, I mean, it's locked up in the business, like working capital and financing growth, where do you think that financing growth comes from, you know, you can use the bank, but it doesn't like, you gotta, you gotta put your own money in there, your own capital, but, um, so I think it's interesting. I, I do, I have had people ask me to become an ESOP company, do I have to be an open book management company? And I'm like, no, you don't. You can, you absolutely can um share with them, you know, the, the, keep doing the thing you're doing right now, which is just share with them the participant statement every year. That's what you would do. And so, I just think if, if you don't at least Educate them enough to where they know where they can make an impact on the value, then you're just not doing them or yourself uh much of a service because Uh, like we, we've had a, you know, profit-based sort of bonus system for years as well, and you'd be amazed how many times employees will come to us saying, We could save money if we swap this tool for this tool because they know if, if we can save some money, it shows up, you know, in the value that they take home and so having people think more like owners has a big payoff. It does have a big payoff, yeah, and it's so you've seen, you've seen the benefit of that and, and I think it's interesting as we talk about your story because you're, um, we'll talk about the actual, the way we've set up your ESOP right now, um, but you've already seen. Um, an impact from your employees. You've, is that in people sticking around? Is that in productivity or what do you, where do you see the value coming in so far? I think both, uh, you know, we've, uh, we've traditionally had a fairly low turnover anyway, but, uh, but we've, you know, through COVID and, and all the uncertainty of things of late, uh, you know, not had any turnover at all. Uh, and, and people seem, you know, to, you know, to be engaged and, and not everything's been good for us during COVID. We had a lot of, uh, uh, you know, since we serve a lot of folks on the west coast up in Seattle and Portland and places like that that Shut down pretty hard for a while. And so it affected our business and, and, you know, we've definitely, um, you know, we, we had crossed the board pay cuts uh for a while and uh those were well received and people appreciated the uh the transparency and what was going on and And um and so I think, you know, and, and I'm, I'm a big believer that when you are a a open book management company, you attract a certain kind of employee that is exactly the kind you want, you know, you, you, you'd love to have all your employees uh really want to engage with that and, and, and act like and think like owners. And I think when you, when that's part of your culture. That that's who you attract and retain and, and there's a huge payoff from that. No, that's good. I mean, it is, the people side of the business is probably the hardest when you, when you're a CEO of some, any business, everybody's probably gonna agree on the same thing. It's, it's, it's hard to find the right people, get the right people in the right seats, keep the right people, motivate the people. I mean, all of those things, when it comes to people. It's hard and it's always changing because they're, we're, they're always changing. I know it's, it's part of it. So, so let's talk about your ESOP transactions. So you guys are, when I say a non, you can, I'm gonna let you explain this. It's a non-leveraged um ESOP without redemption. So tell us, tell us what you did exactly, and, and if you, yeah. Yes, so what we did to get things started was we, we just contributed uh shares of stock straight from the company to the stock, uh, which diluted the existing shareholders a little bit. Uh, but that was the, uh, we decided was the, the most straightforward way to get this thing started. Cool. And so, so, so technically what's happened is you guys gave stock out of your own pockets, your shareholders, and that stock goes from you and into the ESOP Trust. The ESOP Trust then allocates that it's a, it's basically a contribution in this, in this year. It allocates all of that stock immediately to the employees. And so, um, what the decision making process to go through that, can you tell me kind of how that went from in beginning to kind of where it started and then, you know, where it ended up in terms of how, how did you decide on the percentage that you gave? and how did you, you know, feel good about that because it's really money coming out of your own pocket when you get down to it. Yeah. So, so I guess the larger thing about why we decided to do it the way we did was our intention is to be a 100% ESOP. And that is our, uh, our goal, and we hope to get there in the next, you know, 3 or 4 years, hopefully, uh, but we knew that we weren't ready to, to make the leap to 100%. Uh, and honestly, because of a lot of the, uh, research we had done and all, uh, we were looking for uh ways to get into the EO that might save us some money. Uh, as far as getting it established and, and stuff, and by doing a non-leveraged ESOP, it, it, uh, it did make our upfront costs, uh, more reasonable. And, uh, and then as far as how we decided the amount, uh, honestly, we did a, um, uh, a little uh pre-value valuation, you know, kind of an early valuation. To, uh, to get a, uh, get a sense of what the share price was gonna be, uh, once the shares were in the ESOP, and, uh, and, you know, we, we kind of looked at it and said, well, Uh, if we contribute this much stock, that's gonna put a, a, a, a nice number into people's first statement. And, and so we, it was really kind of that, uh, uh, that arbitrary in a way of just, OK, if we put this much in there, what's a statement. Look like because we want, you know, we want those first statements to uh to be something people look at and go, oh, OK, yeah, hey, I have, I have something here. Yeah, yeah, so I didn't pay for that, right? Yeah, so back backing into it and saying, hey, this is what we want the statement to look like and then going, now that makes that makes a lot of sense. So, so technically, um, for because it's a non-leveraged ESOP, you didn't have to engage a trustee. Right. And you didn't have to go through a negotiated or negotiated deal because you weren't selling anything, you were just basically contributing what you had. So, um, what were your, in that, what, what have, what have you experienced in terms of the advantage of, of doing that as opposed to, um, you know, selling some of the stock? Yeah, I think for at this point, it's mostly been uh a cost savings, you know, obviously we didn't, we, we're trying to avoid jumping into uh all the costs at once and, uh, and so we're comfortable being our own uh trustee at this stage and um uh and so, yeah, I think it uh it makes sense for us. It, it's allowed us to To kind of ramp into some of the costs and get some of the, you know, obviously we'll have the, the plan in place and a lot of those things, uh, behind us when we're ready to make the next transaction. Yeah. I would also say it's a lot simpler, you know, from a timing standpoint and and dealing with multiple parties and, you know, pulling together it's a lot simpler. You don't, you just a couple of steps. Um, I know in your transaction, we spent, uh, you know, probably a fair amount of time on ESOP plan design. Um, and when the purpose of doing that is to, you're creating, like you're creating the ESOP plan, even though it's only a couple of percentage points or whatever you guys contributed. Um, but this is not just now, but it's really you have to think long term. So the plan design step, um, I remember kind of going through that with the attorney. What, what were your, you know, in the process of doing that, what did you see the difference between a plan design for your ESOP and then just having a normal 401k plan? Yeah, so we, uh, we've had a 401k for a long time, um, and it's, it's done well. I think, uh, Uh, you know, I, I know exactly what you're asking, but, you know, obviously there, since the employees are not contributing their own money to the ESOP, uh, we wanted to, you know, we just wanted to be very thoughtful about all the, the options we had in the, in the plan document to make sure that uh we were setting it up, uh, the, the way it needs to be set up. To, to keep us happy for the long term, uh, we kind of did the same thing with our 401k. We have some, you know, in our 401k, we, we, we skewed the rules towards. Uh, encouraging savings and encouraging, you know, or discourage, you know, didn't not allowing things like it and that kind of thing because we, we feel like that's a, you know, an important piece of, uh, of their retirement, and we, we intend to keep the 401k. Uh, we're not, you know, in favor of, of having only an ESOP because I feel like. People definitely need the ability to, or the opportunity to invest their own money as well, and, and they need that diversity in their uh in their investments. I forgot, you guys, are you guys still doing the match on the 401k? So we are at this point, we're, we're not sure if, if that'll always be the case. Uh, and part of that, I think we're gonna let the employees kinda uh decide what they're thinking and what they want because obviously if the ESOP's performing well, They may, uh, they may prefer that money that would be going to a match be going to, uh, accelerating the ESOP, you know, so we'll, you know, so that'll be something that, that may change down the road, but at this point the match is still there. Yeah, it's still there. Yeah, yeah, I think the point of my question was just that that that portion of it, did you, were you, did you see any surprises when you're doing the plan design or was it pretty straightforward? I thought it was pretty straightforward. Yeah, yeah, I think sometimes, and again, I, I don't want to make it cookie cutter like ESOs are not cookie cutter at all because they're, you know, there's some technical things, but if you've done part of my point was if you've done and you work through a 401k plan. In doing an ESOP plan design with the attorney, it's really not that complicated. It's just making decisions on investing and eligibility and, you know, and feeling like you've represented your employees well and making sure that you, you've kind of got what you think it would be helpful for them. Also, when you're recruiting people to be able to explain, hey, this is how the ESOP works, I think it's important. Um, I don't know if you had that opportunity to recruit yet with your ESOP, but um I'm sure it will come as you guys start to talk to new people. Yeah, and we really tried to uh to consider the ESOP plan from the standpoint of the long-term employees that will be in the plan, uh, because You know, we want uh You know, we want to protect, especially once we're 100% ESOP, you know, you, you really don't want a new employee to, to be vested in the plan too early because you want to make sure they're a stayer and that they've, they're a fit. Um, we did do some things to accelerate the vesting of people who had been with us for many years. So if you've already been with us a whole bunch of years, you're not gonna start at At 0 on your vesting in the ESOP, uh, so you know, we took some of those things into consideration, but, uh, but it's been kind of interesting even as our employees are understanding and getting their head around how the ESOP works, they're interested in things like, so, you know. What do we, what if we get a new employee and, and, you know, they're not working out, or they gonna walk away with, with, uh, you know, value or, you know, take money with them when they go on and they're interested in how that vesting works, not, not so much from their own standpoint of their own vesting, but understanding that, uh, you know, sort of protecting the herd. Yeah, no, that's good. I think that's the, that's the part, you know, to you as a You know, you're, you're the, you know, representative for your employees in that in that portion of it. And you guys now are the trustee of the ESOP. And is it you and your partner or is it just you? I think it's both of us. Yeah, so both of you guys are the trustee and that now, you know, again, you're not, you're not lever GOP, so it's not like you're, you know, in this major fiduciary crisis of risk, but at the same time, you do have to think for the employees and what's best for them and, and that's kind of part of who you are anyways in your DNA so it just makes sense. Have, have you guys used this at all when it comes to, you know, when you think about your next steps, when it comes to your succession planning process, like when, and when I say that, like, who's gonna be the future Todd in the company? Yeah, well, and we have thought about that and, and so, uh, so initially, my, my co-founder is uh younger than me. I don't know exactly how much, but uh let's say 10 years, something like that. So, Uh, so my co-founder, who's actually serves as president and my official title CEO is that, uh, uh, you know, we're not going anywhere for a while, but, uh, uh, but we actually, you know, I've been amazed at the, uh, uh, the great talent that, that we've attracted and retained in the company and, and so we're not, uh, Uh, especially since we're not in a time crunch, we're, we feel very confident we're gonna, uh, be able to develop some really good leadership for down the road when that comes. But we've also talked very frankly with our employees that You know, once this thing's 100% ESOP, if somebody comes along and wants to buy this place out, you get to decide. Yeah, that's true, and they may want to because, you know, in the business we're in, sometimes people pay really good money on the, you know, with for a strategic purchase. And, and so if somebody comes along and wants to pay a lot of money for, uh for the company, uh, you know, it may be in our employees' best interest to let that happen and, uh, but it'll get to be their choice. And so, uh, that, that could be an eventual, uh, you know, eventual outcome. And we'd be happy for them in that, uh, but, uh, but we also think that developing leadership is, is something that's gonna continue to happen too. Yeah, well, it has to, right, cause, you know, you don't want to work forever. Yep. Nobody does, so no, but awesome. I, I think, you know, we've covered a lot of ground. I, I guess my, my final comment would be just kind of from your perspective, um. Is it going the way you thought it was gonna go with all the research and where you are right now with, with the ESOP? So far, so far, so far so good. Yeah, I think, uh, you know, obviously when we get to the big transaction down the road, uh, that's gonna be a whole another experience, uh, that is gonna be, you know, uh, much more involved than what we've done so far, and, and I'm sure I'll learn a lot during that as well, but, uh, but uh yeah, up to this point, I think, uh, it's gone very well and, and we're very pleased. Yeah, awesome. I think that. Um, well, I like, I like the story. I like the, you know, you've done with it so far, you know, and, and to get motivation and impact on it with your employees already before even having a participant statement. It's pretty, it's pretty cool. So I think that, that's part of the, the approach that you took was really good because you guys took it seriously, you're transparent with your employees and, you know, getting them involved is a really good idea. So, um I think that's, that's a question for a lot of people. How do I actually get, how do I actually use this to really help improve my employee turnover issue maybe, and then also just, you know, motivating them and getting them part of the whole thing. So I think that was really helpful. Um, so thank you for sharing that. Thank you for sharing your whole story, Todd. It was really helpful. Absolutely. I appreciate it. All right, well, well, good. Well, have a wonderful weekend. I know we're we're kind of signing off on a Friday, so enjoy your weekend and, and with all that, um, thank you for joining the podcast today and listening. Um, you know, as you go through your journey to an ESOP, I hope this is helpful to you and tune in for our next one. Thank you so much.